Chapter 1 Marketing Research for Managerial Decision Making

Chapter 1
Marketing Research for
Managerial Decision Making
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
• Describe the impact marketing research has
on marketing decision making
• Demonstrate how marketing research fits into
the marketing planning process
• Provide examples of marketing research
studies
• Understand the scope and focus of the
marketing research industry
1-2
Learning Objectives
• Recognize ethical issues associated with
marketing research
• Discuss new skills and emerging trends in
marketing research
1-3
The Growing Complexity of Marketing
Research
• Technology and growth of global business are
increasing the complexity of marketing
research
• New data collection tools, including Twitter,
clickstream tracking, and GPS, pose serious
questions in regard to consumer privacy
• Current variety of available tools and
techniques makes choosing a method for a
particular research project increasingly
challenging
1-4
Marketing Research
• Links an organization to its market through the gathering
of information
1-5
The Growing Complexity of Marketing
Research
• Marketing research is a systematic process
• Tasks include:
– Designing methods for collecting information
– Managing the information collection process
– Analyzing and interpreting results
– Communicating findings to decision makers
1-6
The Role and Value of Marketing
Research
• Marketing research draws heavily on the
social sciences both for methods and theory
• Marketing research methods:
– Are diverse
– Span a wide variety of qualitative and quantitative
techniques
– Borrow from disciplines such as psychology,
sociology, and anthropology
1-7
The Role and Value of Marketing
Research
• Marketing research can be applied to a wide
variety of problems involving the four Ps:
– Price
– Place
– Promotion
– Product
1-8
Marketing Research and Marketing
Mix Variables
• Product - Product decisions are varied and
include:
– New product development and introduction
– Branding
– Positioning products
• Perceptual mapping: Used to picture the
relative position of products on two or more
product dimensions important to consumer
purchase decisions
1-9
Marketing Research and Marketing
Mix Variables
• Place/Distribution - Decisions include
choosing and evaluating:
– Locations
– Channels
– Distribution partners
• Retailing research: Focus on trade area
analysis, store image/perception, in-store
traffic patterns, and location analysis
1-10
Marketing Research and Marketing
Mix Variables
• Behavioral targeting: Displays ads at one
website based on the user’s previous surfing
behavior
• Shopper marketing: Marketing to consumers
based on research of the entire process
consumers go through when making a
purchase
1-11
Marketing Research and Marketing
Mix Variables
• Promotion - Important influences on any
company’s sales
– Essential that companies know how to obtain
good returns from their promotional budgets
• Most common research tasks in integrated
marketing communications:
– Advertising effectiveness studies
– Attitudinal research
– Sales tracking
1-12
Marketing Research and Marketing
Mix Variables
• Price - Pricing decisions involve:
– Pricing new products
– Establishing price levels in test marketing
– Modifying prices for existing products
1-13
Marketing Research and Marketing
Mix Variables
• Marketing research provides answers:
– How large is the demand potential within the
target market at various price levels?
• What are the sales forecasts at various price levels?
– How sensitive is demand to changes in price
levels?
– Are there identifiable segments that have
different price sensitivities?
– Are there opportunities to offer different price
lines for different target markets?
1-14
Consumers and Markets –
Segmentation Studies
• Major focuses of a marketing research project:
– Creating customer profiles
– Understanding behavioral characteristics
1-15
Consumers and Markets –
Segmentation Studies
• Benefit and lifestyle studies: Examine similarities
and differences in consumers’ needs
– Researchers use these studies to identify two or more
segments within the market for a particular
company’s products
• Marketers use ethnographic research
– To study consumer behavior as activities embedded in
a cultural context and laden with identity
– Requires extended observation of consumers in
context
1-16
Marketing Theory
• Important to many businesses
– Can be useful in thinking business problems and
opportunities
1-17
Types of Marketing Research Firms
• Internal or external
• Custom or standardized
• Brokers or facilitators
1-18
Types of Marketing Research Firms
Internal
• Organizational units that
reside within a company
• Benefits:
– Research method consistency
– Shared information across the
company
– Lower research costs
– Ability to produce actionable
research results
External
• Perform all aspects of the
research
• Benefits:
– Objective suppliers
– Less subject to company
politics and regulations
– Specialized talent for the
same cost
– Greater flexibility in
scheduling studies and
specific project requirements
1-19
Types of Marketing Research Firms
• Customized research firms: Provide tailored
services for clients
• Standardized research firms: Provide general
results following a standard format so that
results of a study conducted for one client can
be compared to norms
– Syndicated business services: Services provided
by standardized research firms that include data
made or developed from a common data pool or
database
1-20
Changing Skills for a Changing Industry
• As marketing research firms expand,
requirements for successfully executing
marketing research projects will change
• Top five skills:
– Ability to understand and interpret secondary data
– Presentation skills
– Foreign-language competency
– Negotiation skills
– Computer proficiency
1-21
Ethics in Marketing Research Practices
• Major sources of ethical issues are the
interactions among the three key groups:
– Research information providers
– Research information users
– Respondents
1-22
Exhibit 1.1 - Ethical Challenges in
Marketing Research
1-23
Ethical Questions in General Business
Practices
• Potential ethical pitfalls for research providers:
– Unethical pricing
– Unnecessary or unwarranted research services
– Client confidentiality issues
– Use of “black-box” methodologies
• Branded “black-box” methodologies: Offered by
research firms that are branded
– Do not provide information about how the methodology
works
1-24
Conducting Research Not Meeting
Professional Standards
• Reasons:
– Fearful of losing the business entirely
– Client pressure to perform research to prove a
predetermined conclusion
– Cost cutting
– Interviewers working for research firms may also
engage in unethical behavior
• Curbstoning: Data collection personnel filling out
surveys for fake respondents
1-25
Abuse of Respondents
• Potential ways to abuse respondents in
marketing research:
– By not providing promised incentive to
respondents for completing interviews or
questionnaires
– By stating that interviews are very short when in
reality they may last an hour or more
– By using “fake” sponsors
1-26
Abuse of Respondents
• At the end of any study involving deception,
subjects must be “debriefed” to explain
deception
– Subject debriefing: Fully explaining to
respondents any deception that was used during
research
1-27
Abuse of Respondents
• Sugging/frugging: Claiming that a survey is for
research purposes and then asking for a sale
or donation
• De-anonymizing data: Combining different
publicly available information, usually
unethically, to determine consumers’
identities, especially on the Internet
1-28
Unethical Activities of the
Client/Research User
• Requesting detailed research proposals from
several competing research providers with no
intention of actually selecting a firm to
conduct the research
• Promising a prospective research provider a
long-term relationship or additional projects
in order to obtain a very low price on the
initial research project
• Overstating results of a marketing research
project
1-29
Unethical Activities by the Respondent
• Providing dishonest answers
– Faking behavior
1-30
Marketing Research Codes of Ethics
• Marketing Research Society summarizes the
central principles in ESOMAR’s code as
follows:
– Conform to all national and international laws
– Behave ethically
– Be particularly careful with children and other
vulnerable groups
– Ensure respondents are cooperating voluntarily
and are well informed of risks
1-31
Marketing Research Codes of Ethics
– Respect rights of respondents
– Protect personal data and use only for intended
purpose
– Conduct projects with accuracy, transparency,
objectivity, and quality
– Conform to principles of fair competition
1-32
Emerging Trends
• Increased emphasis on secondary data collection
methods
• Movement toward technology-related data
management
• Expanded use of digital technology for
information acquisition and retrieval
• Broader international client base
• Movement beyond data analysis toward a data
interpretation/information management
environment
1-33
Marketing Research in Action:
Continuing Case: The Santa Fe Grill
• What kind of information about products,
services and customers should the owners of
Santa Fe Grill consider collecting?
• Is a research project actually needed?
– Is the best approach a survey of customers?
– Should employees also be surveyed?
– Why or why not?
1-34